Second leg of urban reforms may get delayed

The launch of the second phase of the UPA government’s massive urban modernisation programme — the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) — is set to be delayed.

Launched in 2005, JNNURM-I — a reform-linked programme to upgrade urban infrastructure of Indian cities — ended in March 2012. The urban development ministry is now at loggerheads with the Planning Commission on the contours of the second phase, and with the finance ministry on the quantum of funds required. Ministry sources said the second phase is unlikely to roll out before the year-end.

Sudhir Krishna, urban development secretary, told HT, “We are in the process of finalising JNNURM-II. It will take some more time.”

With over a majority — about 73% — of projects sanctioned under JNNURM-I still under implementation as on March 2012, the plan panel is insisting on their completion before taking up big-ticket projects in phase II.

Also, the panel’s insistence that the ministry should not “micro-manage” projects and let respective states/cities decide on specific projects has not gone down well with the ministry.

“Ultimately, it’s the respective states/cities that are better equipped to decide the kind of projects required based on their city plan,” said Arun Maira, member, Planning Commission.

The funding for JNNURM-II has also become a bone of contention. While the ministry had demanded Rs 1.7 lakh crore, the finance ministry — citing poor absorption of funds — has approved Rs 66,107 crore in the 12th Plan.

Of the Rs 66,000 crore committed by the Centre for JNNURM-I till March 2012, only Rs 39,000 crore has been released by the UD and housing and urban poverty alleviation ministries.

The latter is implementing housing projects for the urban poor.

“The main problem is that a majority of our municipalities are neither equipped nor have the capacity to spend the money,” said an official.